Dear Professional Collegue

Required your valuable suggestions for the query posted below:

One Branch of a Nationalised Bank availed input credit in Service Tax. They have availed 100% credit of input service under Cenvat Credit Rules, 2004, for providing output service “Banking & Other Financial Services” .

The department has given a show cause notice for the Financial year 2006-07, 2007-08, stating that, the services provided by branch consisted of both taxable as well as exempted services. In such a situation they should have maintained a separate account for receipt, consumption of input service meant for providing taxable services and exempted services as provided under Rule 6(2) of Cenvat Credit Rules, 2004 or utilize credit only to the extent of an amount not exceeding 20% of the amount of Service Tax payable on taxable output service as provided under Rule 6(3)© of the said rules prior to its amendment under Notification No 10/2008-CE(NT) dt 01.03.2008 dt 01.04.2008

The branch’s stand is as follows:
As per provisions of Section 65(12)(a)(ix), the banking and other financial services means and include, “other financial services, namely, lending, issue of pay order, demand draft, cheque, letter of credit and bills of exchange, transfer of money including telegraphic transfer, mail transfer, and electronic transfer, providing bank guarantee, overdraft facility, bill discounting facility, safe deposit locker, safe vaults, operation of bank accounts.” Further as per Rule 6(2)(iv) of the Service Tax (Determination of Value) Rule 2006, no service tax is payable on interest on loan. The Rule specifically state that, the value of taxable service does not include interest on loan. So interest on overdraft facility, cash credit facility, discounting of bills does not form part of taxable service also not stated as exempted services and those are excluded from service tax net. The branch is collected and deposited service tax on commission and charges from such overdraft facility, cash credit facility, discounting of bills, bills of exchange & cheques.
Further as per the notification no 29/2004 dt 22.09.2004, the Central Government, has excluded interest on overdraft facility, cash credit facility or discounting of bills from service tax leviable thereon with the condition that, the said interest amount is shown separately in an invoice, bills or as the case may be a challan issued for this purpose. The branch is also complying this notification by showing this interest separately by way of maintaining different accounts of such overdraft facility, cash credit facility and discounting of bills, bills of exchange or cheques.

Therefore the branch has claimed 100% credit of input service under Cenvat Credit Rules, 2004, for providing output service

Pl provide your valuable suggestion along with reference to the Act, Rule, Notification on the above matter. Can the stand of the branch be justified

CAN A SERVICE TAX APPEAL BE FILED AFTER THE EXPIRY OF 6 MONTHS FROM COMMUNICATION OF THE ORDER?
IS THERE ANY CASE LAW REGARDING SUCH MATTER?




PLEASE SUGGEST...........

whether reimbursement expenses which are not taxable in service tax will be included in computing rs.9lakh limit for getting service tax registeration???nd whether these exp. are included for checking ssi exemption???

I have opened a restaurant in Hyderabad . I want to know is service tax registration required on restaurants. If so on what amount we should collect the service tax.

Thanks

X.Pvt. Ltd. registered under service tax under works contract.

Company building residencial house 2 floors.

My qustion is service tax applicable or not.

If suppose i m considering Service tax liability on billing basis instead of receipts & taking input credit on payment basis & in future suppose my drs became bad so whether i am allowed to adjust excess service tax paid against my future liability. Plz

Dear Friends
Greetings!

Please help in this...

A private co. (Say X) engaged in trading of commodities for which it purchase it locally and then sale it to some other ltd. co. in the same state by engaging the individual truck owners to carry the materials.
This company ( X) pays to the individual truck owners.( Say Rs. 20,000/- each and in total 15,00,000 to different owners)
Now while billing to the buyer (Say-Y) it shows seperately transportation in the bills with amount of 15,50,000/-( an excess of 50,000/-)and also pays VAT ( Karnataka) on the transportation amount alos along with the price of the materials.
Now the buyer (Y)says that he himself will pays the service tax on the transportation part and we ( co. X) need not to pay the same.
My Query is whether it can be done? I have impression that since we are paying to the transportors we had to pay the service tax on that.
please guide.

Hi, Iam having a private company.It is exporting software development to UK.Presently the turnover is less than 9 lakhs.The amount gets converted into indian currencies and deposited into copmany account from the foriegn company bank account through Foriegn Inward Remmitances. Now we are planning to increase the turnover to 15 Lakhs. Do we need to register for service tax? Do this export of service get exemption??. What is convertible Foriegn Exchange???

Sir,

How can we bifurcate a contract (Civil work) into WORK CONTRACT & NORMAL SERVICE (CONSTRUCTION OF COMPLEX & INDUSTRIAL SERVICES) based on the scope awarded to a contractor.

Regards,

Lijo Philip

we are a SSI and we hv ST reg no. as GTA...
we are service recieptants...bt our taxable services were approx. 2lacs per year..so we hvn't filled any returns after sept,07...and as a results we were sent notice by ST department...for non filing of returns....
but master circular says that if below no NIL returns are to be filled...

What is d solution, can anybody suggest..???